Los Angeles has repealed its ban on pot shops, granting a reprieve to the city's estimated 1,000 dispensaries but leaving their legal status in limbo.

The city council voted 11 to 2 on Tuesday to rescind the ban, which it had approved in July, following lobbying by the increasingly well-organised cannabis sector.

It was a victory for organisations and unions which represent pot shop owners and workers as well as activists who say they need they need medical marijuana to treat serious illnesses.

Bill Rosendahl, 67, a council member with diabetes, neuropathy and cancer, made an impassioned plea for the dispensaries. "Where does anybody go, even a councilman go, to get his medical marijuana?," he asked in a hoarse voice, his body gaunt. Doctors, he said, told him he might not have "much time to live".

However opponents, including police, council members and neighbourhood groups, said pot shops used the medical argument as cover to sell to recreational users, turning areas seedy and crime-ridden.

The vote will need to be repeated next week because it was not unanimous. It was triggered after pot shop advocates collected more than 20,000 signatures to include the issue in a March referendum.

The council opted to reverse the ban rather than face an expensive and possibly doomed referendum fight with a sector which has hired lawyers and lobbyists and formed groups such as Americans for Safe Access and the Greater Los Angeles Collective Alliance. The coalition has another powerful member in the United Food and Commercial Workers union, which represents workers at dozens of shops.

The city's pot shops remain in legal limbo. Federal statutes forbid the sale of marijuana, but California – along with 16 other states and the District of Columbia – permit medical marijuana. The apparent contradiction has become most apparent in LA where pot shops have proliferated to the point even some advocates say there are too many and that rogue operators give the rest a bad name.

Green-uniformed pot shop workers on the Venice boardwalk invite tourists into stores for consultations with doctors who diagnose ailments and write cannabis prescriptions.

Last week federal authorities raided several pot shops in the city and ordered dozens of others to close within two weeks.

One council member, Mitchell Englander, urged the city to use zoning laws to crack down on pot shops because they were not on a municipal list of approved land uses.